EPFO Board Meeting: Key Decisions and Initiatives
Dr. Mansukh Mandaviya, the Union Minister for Labour & Employment and Youth Affairs & Sports, chaired the 236th meeting of the Central Board of Trustees (CBT) for the Employees’ Provident Fund (EPF) in New Delhi. The meeting included prominent figures such as Sushri Shobha Karandlaje, Minister of State for Micro, Small & Medium Enterprises and Labour & Employment, and Smt. Sumita Dawra, Secretary of Labour & Employment. The gathering focused on significant updates and initiatives undertaken by the EPFO since the last meeting.
Major Initiatives and Achievements
During the meeting, the Board highlighted several major initiatives taken by the EPFO. One notable change is the increase in the auto claims settlement limit from Rs. 50,000 to Rs. 1 lakh. This extension now includes advances for housing, marriage, and education. In the current financial year, the EPFO has successfully settled 1.15 crore claims through this auto mode, demonstrating a commitment to efficiency. The Board also noted a significant reduction in the rejection ratio, which has decreased to 14% as of November 2024.
In the financial year 2023-24, the EPFO settled a remarkable 4.45 crore claims, amounting to Rs. 1.82 lakh crore. As of now, 3.83 crore claims have already been settled for over Rs. 1.57 lakh crore. These figures reflect the EPFO’s ongoing efforts to streamline its processes and enhance service delivery to its members. Additionally, the implementation of the CITES 2.01 project aims to upgrade both hardware and software, simplifying the claim settlement process and enabling a one-member, one-account system. This initiative is expected to significantly reduce hassles for members during claim settlements.
Key Decisions for Member Benefits
The CBT made several groundbreaking decisions aimed at benefiting EPF members. One of the most significant amendments approved was to paragraph 60(2)(b) of the EPF Scheme, 1952. Previously, interest on claims settled until the 24th of the month was only paid up to the end of the preceding month. Now, members will receive interest up to the date of settlement, leading to increased financial benefits and reduced grievances.
Moreover, the Board approved the processing of interest-bearing claims throughout the entire month, rather than halting between the 25th and the end of the month. This change is expected to minimize delays, ensure timely settlements, and optimize resource utilization. The CBT also reported the successful completion of the first pilot of the Centralized Pension Payment System (CPPS) in October 2024, which will streamline pension disbursement for over 78 lakh EPS pensioners across India. This system aims to expedite claim processing and eliminate the need for pensioners to visit banks for verifications.
Employer-Centric Reforms and Initiatives
The CBT also focused on reforms that benefit employers. One key decision was to simplify the criteria for empanelment of banks for centralized collection of EPF contributions. The new criteria will now include all agency banks listed with the Reserve Bank of India (RBI) and other Scheduled Commercial Banks that meet a minimum threshold of EPFO collections. This change aims to enhance the Ease of Doing Business and improve service delivery for establishments.
Additionally, the CBT recommended the EPFO Amnesty Scheme 2024 to the Central Government. This initiative encourages employers to voluntarily disclose and rectify past non-compliance without facing penalties. By allowing a simple online declaration, the scheme aims to extend social security benefits to more employees and rebuild trust with employers. This amnesty scheme aligns with the Employment Linked Incentive Scheme announced in the Union Budget 2024-25, promoting job creation and formalization of the workforce.
Investment Strategies for Enhanced Returns
The CBT also approved a Redemption Policy for Exchange-Traded Fund (ETF) investments in CPSE and Bharat 22. This policy mandates a minimum five-year holding period and requires returns to exceed government securities. The aim is to generate income for the EPF Scheme’s ‘Interest Account.’ Furthermore, the Board approved guidelines for investments in units issued by Public Sector Undertaking (PSU) sponsored Infrastructure Investment Trusts (InvITs) and Real Estate Investment Trusts (REITs).
These investment strategies reflect the EPFO’s commitment to prudent management of its corpus, ensuring enhanced returns for its members. By diversifying its investment portfolio, the EPFO aims to secure better financial outcomes for its members while maintaining a focus on long-term growth.
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